Latest version of Affordable Housing Bonus Program exempts projects that demolish any housing

City planners have further amended elements of a proposed program that aims to incentivize more below-market-rate housing in new developments in San Francisco, most significantly to recommend exempting projects that demolish any residential units.

That change and others to the Affordable Housing Bonus Program were made following a Planning Commission meeting last month, in which commissioners asked for more clarification on the program and opponents expressed concerns that incentivizing developers could lead to displacement.

The updated version of the program will seek approval from the Planning Commission on Thursday.

The program provides incentives for developers of projects with at least five units, primarily in areas zoned as neighborhood commercial districts, to build at least 30 percent of the units as below-market-rate.

In return, developers can build up to two additional stories, as well as other incentives.

The program would apply to more than 30,000 parcels. City planners have estimated that even if projects that remove housing units are exempt, the program could still add 5,000 below-market-rate homes to San Francisco’s housing stock in the next two decades.

“When we did our analysis of how many units and how many affordable units we expected this program to produce, we assumed that nobody would demolish or choose to redevelop an existing residential unit,” said Kearstin Dischinger, a long-range planner with the Planning Department.

Projects that would have removed any rent-controlled homes from the market were already exempt prior to the latest changes, as well as those that demolish a historic structure or cause significant shadow impacts on public parks.

The program would establish The City’s first permanent source of middle-income housing. Of the 30 percent below-market-rate housing included in exchange for taller or denser buildings, 18 percent would be affordable to moderate- or middle-income households, and 12 percent would be designated for the low-income bracket.

Per city planners’ latest recommendation for the program, the level of affordability within the 18 percent could differ. Though an exact number has not been determined, rentals would be available to households that earn between 55 and 120 percent of the area median income, and homeownership for households that earn between 90 and 140 percent.

The program will be heard at the Planning Commission no earlier than 3:30 p.m. Thursday.

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